On Friday, Israel appeared to be about to "retaliate" against Iran, causing crude oil and gold prices to soar and US stocks to plummet.
Although both Israel and Iran soon came out to clarify, the Iranian side said that it intercepted the drone that attacked and did not cause too much loss, which caused a sharp retreat in the follow-up market.
This phenomenon shows that the two sides of the conflict do not want to make things too big, but the financial market does not seem to buy the result, and the price fluctuation suddenly becomes very manic.
The impact of the conflict on the US stock index
The widening situation in the Middle East has weakened the market's sensitivity to news of the Fed's interest rate cut and increased concerns about war fears.
Although there was a sharp rebound on Friday night, if the conflict does not subside for a day, it will be difficult for the US stock index to stop this round of correction. Moreover, the current reasons for the Fed to cut interest rates are vague, lacking the support of interest rate cut expectations, and high-valued technology stocks are under greater pressure, dragging down the market to continue to decline.
However, the U.S. stock index still has the possibility of the Fed cutting interest rates to rescue the market in the medium and long term, so this round of decline can only be defined as an adjustment. When the stock index falls deeply, the Fed has a large reason to say that it can start cutting interest rates in order to stabilize the economy, so the stock index trend is not pessimistic.
As for this round of decline, let's look at mid-May first. After all, these time points are common inflection points for US stocks, and there is a Fed interest rate meeting in May, which is often when market expectations change. As for the decline, if the S&P is used as the benchmark, it is still believed that the gap of 4650 points at the end of last year is an important support position, and the gap still needs to be filled.
As the Nasdaq is the main decliner in this round, let's see if 15,000 can be strongly supported. Of course, if the above-mentioned decline comes true, it means that the market volatility will be greatly increased in the next 2-3 weeks. You must be mentally prepared.
Can the price of gold continue to rise?
Geopolitical conflicts have stimulated risk aversion in gold prices. At present, there is no momentum to stop the decline. The 5-day moving average still strongly supports the operation of gold prices, so it is still very difficult to be bearish on gold prices.
From a technical point of view, if the price of gold remains above the 5-day moving average in the first half of next week, then the second half of the week will usher in a new round of upward pulse market. The situation is similar to the consolidation trend of gold prices from March 11th to 26th. After the consolidation, the price of gold pulsed by 200 points. In this kind of squeeze market, don't rush to guess the top. After all, history is usually used to break,.
As for silver, it is in the same direction as gold. The key depends on whether silver can break through the $30/oz mark when gold pulses upwards. Options are better.
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